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To examine the phenomenon of the transnational transfer of strategic organizational practices within multinational companies, I use a cross-disciplinary approach. After conceptualizing the success of a transfer as the institutionalization of the practice at the recipient unit, I develop a multilevel model of transfer success, based on the notion of the contextual embeddedness of the process of transfer. I propose that three sets of factors at three levels-country, organization, and individual-affect transfer success reflecting social. organizationaL and relational embeddedness. Finally, I discuss the theoretical and practical implications of this research.
For purposes of synergy and efficiency, organizations often engage in cross-unit transfers of business practices that reflect their core competencies and superior knowledge and that they believe to be a source of competitive advantage. Internal transfers of practices are important for all types of organizations, but they are critical for multinational corporations (MNCs), for a primary advantage that a multinational firm brings to foreign markets is its superior knowledge, which can be utilized in its subsidiaries worldwide (Bartlett & Ghoshal, 1997; Kogut, 1991).
Although scholars long have recognized the strategic importance of transfers of organizational practices within MNCs, we continue to find substantial evidence that these transfers are not always smooth and successful. Researchers have shown that there are various barriers to transfer success-some relating to the characteristics of the practices that are being transferred and others of a cultural and organizational nature (Ghoshal & Bartlett, 1988; Kedia & Bhagat, 1988; Szulanski, 1996; Zander & Kogut, 1995). On many occasions, foreign subsidiary managers are frustrated with headquarters` requests for implementation of "yet another new program."1 Subsidiary managers may, intentionally or not, decide not to implement a particular practice while reporting otherwise to headquarters. They may implement practices only partially, adopting those components that they feel "people here will buy in" and ignoring the rest. In some extreme cases, local managers feel so alienated from the parent company that they do not believe in the parent's motives and, thus, do not even consider complying with implementation requests.
Here, I develop a theoretical framework specifying the factors that contribute to the success of the transnational transfer of strategic organizational practices within MNCs. Strategic organizational practices are those practices considered to be dominant, critical, or crucial for...